PARIS: Cracks appeared on Monday in a deal to create the world’s biggest cement company, with Swiss group Holcim seeking a modification of the merger with French giant Lafarge.
The deal “can no longer be pursued in its present form,” said Holcim in a statement of the merger based on the offer of one Holcim share for one Lafarge share.
The Swiss group said it wants to renegotiate the question of parity as well as governance issues.
But Lafarge in a separate statement said it was only “willing to explore the possibility of a revision of the parity . . . but will not accept any other modification of the terms of the existing agreements.”
Holcim and Lafarge announced last year they were merging to create a cement behemoth, with an eye on booming construction in emerging markets.
The deal, a key event in the global construction industry, would have created a cement titan employing more than 130,000 people and generating annual sales of 32 billion euros and underlying profits of 6.5 billion euros.
The two groups together have a stock market value of 40 billion euros ($55 billion), Holcim chairman Rolf Soiron told a press conference at the time.
But questions have begun to emerge over the issue of parity particularly after the two groups posted divergent fourth quarter earnings—Holcim recorded a jump of 43.5 percent in net profit to 458 million francs while Lafarge posted a loss of 145 million euros for the three months.
The sharp rise in the Swiss franc has further driven up Holcim’s value.
According to Swiss media reports, Holcim wants a greater share of the merged group.